31.01.2019

Pots and kettles

Yassamine Mather asks who is really responsible for incompetence and corruption

Every time the issue of sanctions against Iran - or this week Venezuela - is mentioned, commentators rightly point out that the dire economic situation in these countries, the large-scale hunger and destitution, is not just because of sanctions, the aggressive US foreign policy and plans for regime change from above. These conditions exist because of incompetence and corruption of the rulers of these countries.

However, a comrade reminded me this week that in making such statements we should also consider the fact that one of the aims of sanctions is to encourage incompetence and corruption. Severe sanctions on an economy under a semi-dictatorial regime allows those with access to power to accumulate huge fortunes - they use advantageous rates of foreign exchange, available only to high-ranking government officials, to take advantage of the black market or the problematic distribution of overpriced goods. In other words, sanctions themselves are a cause of corruption.

Let me start with the issue of competence. One could argue that the in current situation governments in power in Europe and in the United States are not showing much sign of that. In the United Kingdom, the Tory administration has spent two and a half years negotiating withdrawal from the EU, leading to what can only be described as a totally uncertain and chaotic situation - mainly as a result of the negotiations carried out under a prime minister and cabinet whose main concern is trying to hold the Conservative Party together.

Their incompetence was particularly highlighted when we heard that a firm with no ships had been granted a contract worth millions of pounds to run extra ferries in the event of a ‘no deal’ Brexit. It has not previously operated a ferry service and is not planning to do so until close to the UK’s scheduled departure date from the EU. If the leaders of Iran’s Islamic Republic had made such a decision there would have been no end to discussions about their ability to rule! Or was it ‘competent’ to spend money on the simulation of traffic for the same purpose? Around 150 lorries were brought together in a disused Kent airport.1 I think most people, including in ‘third world’ countries, would have been able to tell UK ministers that these days you can buy software to simulate traffic flows!

Last week three airports in New York faced temporary closure as a result of the government shutdown, because air traffic controllers could not guarantee the safety of air passengers. Is the Trump administration an example of competent government - one that countries like Iran should emulate?

Of course, none of this excuses the kind of very real incompetence we have seen in Iran - or for that matter Venezuela. My point is that it is hypocritical to go on about incompetence in ‘third world’ countries whose regimes meet with the disapproval of the imperialists, while ignoring everyday occurrences in Whitehall or Washington.

Sultans

When it comes to corruption, probably few countries can compete with the various factions of Iran’s Islamic Republic. Recently a member of Iranian majles (parliament) asked president Hassan Rouhani about his relationship with the ‘sultan of bananas’ - a reference to Rouhani’s son-in-law. The news agencies reporting this reminded us that the same gentleman is also known as the ‘sultan of apples’ - both titles refer to his role in controlling the monopoly on importing these fruits into Iran.2 Inside the country, the website Saten tells us of all the corrupt owners of monopoly distribution of goods, known as the ‘sultan of …’ - ranging from fruit to steel and gold coin. Most have made their fortune thanks to their connections with those in power - and sanctions, of course.3

In other words, sanctions - both during the time of president Mahmoud Ahmadinejad (in particular after 2009) and also during the more recent wave under Donald Trump - have played a crucial role in the rise in the levels of corruption in Iran. So, although it is easy to blame such corruption - in Iran, Venezuela or any other ‘third world’ country - on local rulers, the real picture is more complicated and such glib comments are often hypocritical.

Moreover corruption is not just a ‘third world’ phenomenon. As Richard D Wolff points out, “Corruption is endemic to the capitalist system”. He writes:

What chiefly drives this sort of political corruption today is capitalism’s structure. For many capitalist enterprises, competitive and other pressures exist to increase profits, growth rates, and/or market share. Their boards and top managers seek to find cheaper produced inputs and cheaper labour-power - to extract more output from their workers, to sell their outputs at the highest possible prices and to find more profitable technologies. The structure provides them with every incentive of financial gain and/or career security, and advancement to behave in those ways. Thus, boards and top managers seek the maximum obtainable assistance of government officials in all these areas and also try to pay the least possible portion of their net revenues as taxes.4

Guy Standing reminds us in his book, The corruption of capitalism: why rentiers thrive and work does not pay: “There is a lie at the heart of global capitalism. Politicians, financiers and global bureaucrats claim to believe in free competitive markets, but have constructed the most unfree market system ever.”5

Of course, the multifaceted dictatorship under the competing factions of the Islamic Republic has given special impetus to the thriving of corrupt leaders and their relatives. However, the situation is not as unique as supporters of ‘regime change from above’ would like us to believe. Most of them do not seem to realise that the model country they name as an example of democratic, free-market, capitalist development - South Korea - is in fact another one of those corrupt regimes. In October 2018, the former president, Lee Myung-bak, was sentenced to 15 years in prison for corruption. He was just the latest in a succession of former presidents and senior officials in South Korea who have faced corruption charges soon after leaving office.

The other characteristic of ‘third world’ dictatorships is nepotism and hypocrisy. Iranian social media is full of stories about sons and daughters of ayatollahs (many of whom are prominent in shouting ‘Death to America’ both at state-sponsored demonstrations and Friday prayers, and are currently studying or working in the United States). I know of a Twitter hashtag addressed to senior politicians, asking them to declare where their offspring live or work. Again we do not need to look far to find parallels. Ardent Brexit supporter Nigel Farage has apparently secured German passports for his sons, while, according to The Guardian, Jacob Rees-Mogg has already established investment funds in Dublin to allow his business interests to continue to benefit from EU rules and regulations.

Some on the fringes of the Iranian left have joined royalists and other supporters of ‘regime change from above’ in praising the Trump administration’s hard line against Venezuela. They hope the kind of aggression US is threatening against Caracas will soon be repeated in Tehran. Someone should remind them that in the 21st century most Iranian are conscious of the global situation. Not only are they familiar with aspects of what I have mentioned above, but they also know about attempts at regime change in other countries of the region: Iraq, Syria, Libya, Afghanistan.

That is why any talk of the threatened Venezuela-style intervention in Iran only strengthens the current regime.